Hakendorf v Vivian

Hearing date: 24 November 2004

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

On 8 November 2004 Royce J. granted a freezing injunction for which the return date was initially 15 November, but which has been extended to today. The Applicant is Ms. Hakendorf who is a solicitor practising under the name Mary Hakendorf & Co. Solicitors whom I shall refer to as the Solicitor. The Respondent is Collette Vivian Countess of Rosenborg whom I shall refer to as the Wife. The order of 8 November was made on an application without notice. The substance of the order was that the Wife must not 'sell dispose' of' charge or otherwise deal with property, or any interest that she may have in it, at an address in Kensington: 'and secondly` use spend or otherwise deplete any proceeds of sale due to her from her interest in the property if the effect would be to reduce the balance of those proceeds of sale below £80,000.

There was also a substantive provision in that order that the Solicitor be at liberty to commence proceedings against the Wife forthwith for recovery of the costs due to her in representing the Wife notwithstanding that a period of one month had not elapsed since delivery by the Solicitor to the Wife of a final bill of costs.

That is an order made under the Solicitors Act 1974 section 69 which reads as follows:

"Subject to the provisions of this Act, no action shall be brought to recover any costs due to a solicitor before the expiration of one month from the date on which a bill of those costs is delivered in accordance with the requirements mentioned in Subsection (2); but if there is probable cause for believing that the party chargeable with the costs – (a) is about to quit England and Wales, to become bankrupt or to compound with his creditors, or (b) is about to do any other act which would tend to prevent or delay the solicitor obtaining payment, the High Court may, notwithstanding that one month has not expired from the delivery of the bill, order that the solicitor be at liberty to commence an action to recover his costs and may order that those cost be taxed…"

On 22 October 2004 the Solicitor had delivered what was described as a final bill to the Wife. On 5 November 2004 she delivered an amended version of that final bill to the Wife. Today the Wife seeks the discharge of the injunction and payment of her costs on an indemnity basis.

The background to this matter is that the Solicitor acted for the Wife in the matrimonial proceedings between the Wife and her husband from September 2003 until her instructions were terminated on 5 October 2004. Thereafter the Wife gave notice that she would act in person. She is still acting in person in the matrimonial proceedings, although she is represented by solicitors and counsel in these proceedings.

The divorce proceedings issued in the Principle Registry of The Family Division have been bitterly fought and highly complicated. There have been issues of competing jurisdiction, the amount of periodical payments for the Wife and her child, financial provision by way of ancillary relief and other issues relating to the child, who unhappily, is suffering from a serious illness which requires regular medical attention.

The Wife and husband are each citizens of states other that the United Kingdom, the husband being a citizen of a member state of the European Union. The Wife is now aged 37 and is a single mother with firm roots in this jurisdiction. However she also has connections with other countries including one in the Caribbean where her mother owns a house.

In the period of some thirteen months following the Solicitor taking over the conduct of the case in 2003 there were nine applications to the court in all of which the Wife was either successful or substantially successful. On each of those occasions the husband was either ordered to pay the costs, or agreed to do so or the costs were reserved. It is the Solicitor's view that the opportunities for further resistance by the husband to the claims of the wife are now becoming limited. The Solicitor believes that the Wife and husband are probably in direct negotiations or are likely to be in the near future. Since the Wife is still acting in person, the Solicitor fears that the Wife, under pressure from the husband, may make or seek to make arrangements with him which are likely to or designed to make it difficult or impossible for the Solicitor to obtain payment of the costs which she had incurred and were outstanding when her retainer was terminated on 5 October 2004.

The Solicitor's witness statement includes a quotation from Munby J. in which he referred to the husband's conduct over the issue of jurisdiction as "litigation gamesmanship of the worst kind". On 12 September 2003 the Solicitor was instrumental in the Wife obtaining from Munby J. a temporary Freezing Order over the husband's interest in the former matrimonial home, that being an order which remains in force. At that time the Wife was nearing destitution. The Solicitor states that one of the reasons why she was willing to take on this complicated case in these circumstances was that the Wife promised at the outset that she would pay the Solicitor £20,000 from the sale proceeds of her mother's car, which she said her mother was selling, to help her, the Wife, with her legal fees. The Solicitor states that thereafter various excuses were made by the Wife one of which was that, due to exchange control, the money could only be brought out in monthly sums of £2,500, none of which the Solicitor ever received. It was for that reason, she says, that she did not require a charge to be given in her favour over the former matrimonial home at the outset. She now says she believes that she was being strung along.

The costs of six of the nine hearings in which the Solicitor was involved were paid by the husband to the Solicitor. These amounted to £38,000 plus counsels` fees, VAT, and disbursements totalling £64,439. The Solicitor has received in addition £4,000 to which I will revert.

On 26 and 27 July 2004 there was a further hearing before Munby J. A number of matters were before the court, on all of which the Wife was successful or substantially so. The costs have been reserved. Directions were given. The case was listed for a Financial Dispute Resolution Hearing for half a day on 7 December 2004 and set down for a three-day trial in February 2005.

The order of 27 July 2004 includes the following:

"Upon the Wife undertakings to the court to pay to her solicitors towards the discharge of her legal fees all sums received under paragraph 11 below…

11. The husband do pay to the Wife the sum of £16,000, in monthly instalments of £4,000 on her undertakings recited above, payable monthly in arrears with effect from 27 July 2004 and on the 27 ^th day of each month thereafter".

The first payment under that order was made to the Wife at the end of August 2004 and paid to the Solicitor two weeks later. The second payment, it is common ground, was made to the Wife at the end of September, before the Solicitor's retainer was determined. But it has not been paid by the wife to the Solicitor.

In her affidavit made on 8 November 2004, the Solicitor says this as to that £4,000;

"22. … I have asked the Defendant for it; I warned her that I would institute legal proceedings against her if she did not pay it; my bill to the Defendant specifically incorporated the dates of and amount of all time spent personally on her (whether in person or by telephone) since the said Order of 27 July 2004 was made, and the costs incurred on that aspect alone well exceeded the £8,000 which should have been paid to my firm, if the Defendant had honoured her undertaking to the court to pass the second instalment of £4,000 to me.

23. The time spent personally on the Defendant from 27 July 2004 was, however, only one aspect of the costs incurred from that time. As will be seen from the Order, there was other work to be done prior to the hearing of the Financial Dispute Resolution on 7 December 2004 (that, incidentally, was why the A v A Costs Order was only payable for a period of 4 months, the last payment being due ten days before that hearing).

24. Pursuant to that Order, I prepared two very substantial documents on behalf of the Defendant (namely the Scott Schedule re: house contents and her Replies to Questionnaire, so that the only work remaining, prior to preparation for the FDR, was to prepare a concise narrative, which would largely have been an amalgamation of evidence already before the Court). The preparation of the said two documents was exceedingly time consuming, and the Defendant was aware of that as well as the time spent on her personally…

25. As will be apparent, no sooner had I finished the preparation of the second of those two lengthy documents, than the Defendant terminated my firm's retainer. She was thus in possession of the important documentation required for the FDR. I was aware that the Defendant appeared to have stepped up the amount of my time that she was taking. Since the hearing on 27 July, 60.5 hours were spent in this matter, being £17,771.88 inclusive of VAT for that period alone, of which more...